scholarly journals Using the General Equilibrium Growth Model to Study Great Depressions: A Reply to Temin

2008 ◽  
Author(s):  
Timothy Jerome Kehoe ◽  
Edward C. Prescott
Keyword(s):  
General Equilibrium ◽  
Growth Model ◽  
Equilibrium Growth

scholarly journals THE EVOLUTION OF TAXES AND HOURS WORKED IN AUSTRIA, 1970–2005

2014 ◽  
Vol 19 (8) ◽  
pp. 1800-1815 ◽  
Author(s):  
John T. Dalton
Keyword(s):  
General Equilibrium ◽  
Growth Model ◽  
Labor Income ◽  
Marginal Tax Rate ◽  
Hours Worked ◽  
Tax Rate ◽  
Time Period ◽  
Working Age ◽  
Equilibrium Growth

Aggregate hours worked per working-age person decreased in Austria by 25% from 1970 to 2005. During the same time period, taxes increased, particularly the effective marginal tax rate on labor income. Using a standard general equilibrium growth model with taxes, I quantitatively assess the role played by the evolution of taxes in the evolution of hours worked in Austria. The model accounts for 76% of the observed decrease in hours worked per working-age person. My results are in line with other studies, which find taxes play an important role in explaining aggregate hours worked.

scholarly journals GREEN SPENDING REFORMS, GROWTH, AND WELFARE WITH ENDOGENOUS SUBJECTIVE DISCOUNTING

2014 ◽  
Vol 19 (6) ◽  
pp. 1240-1260 ◽  
Author(s):  
Eugenia Vella ◽  
Evangelos V. Dioikitopoulos ◽  
Sarantis Kalyvitis
Keyword(s):  
Fiscal Policy ◽  
General Equilibrium ◽  
Growth Model ◽  
Production Technology ◽  
Environmental Conditions ◽  
Environmental Concerns ◽  
Poverty Trap ◽  
Optimal Response ◽  
Optimal Fiscal Policy ◽  
Equilibrium Growth

This paper studies optimal fiscal policy, in the form of taxation and the allocation of tax revenues between infrastructure and environmental investment, in a general-equilibrium growth model with endogenous subjective discounting. A green spending reform, defined as a reallocation of government expenditures toward the environment, can procure a double dividend by raising growth and improving environmental conditions, although the environment does not impact the production technology. Also, endogenous Ramsey fiscal policy eliminates the possibility of an “environmental and economic poverty trap.” In contrast to the case of exogenous discounting, green spending reforms are the optimal response of the Ramsey government to a rise in the agents' environmental concerns.

INFLATION AND INEQUALITY IN A GROWING ECONOMY WITH CASH AND CREDIT GOODS

2020 ◽  
pp. 1-34
Author(s):  
Juin-Jen Chang ◽  
Hsieh-Yu Lin ◽  
David W. Savitski ◽  
Hsueh-Fang Tsai
Keyword(s):  
Income Inequality ◽  
General Equilibrium ◽  
Growth Model ◽  
Negative Relationship ◽  
Policy Implications ◽  
Kuznets Curve ◽  
Growing Economy ◽  
Credit Goods ◽  
Equilibrium Growth ◽  
Welfare Distribution

We develop a dynamic general equilibrium growth model, where households purchase final goods on cash or credit and have different capital and money endowments, to investigate whether inflation affects trends in income and consumption inequality. We show that, under a strong substitutability between cash and credit goods, inflation has a negative relationship with income inequality, but a U-shaped relationship with consumption inequality. The divergence between income and consumption inequality explains several recent empirical observations. This result has important policy implications, as consumption inequality better reflects the welfare distribution whereas income inequality fails to capture consumption disparities resulting from different consumption and asset distributions across households. In the growth model with heterogeneous households, there is a mixed relationship between growth and income inequality, confirming the existence of the Kuznets curve. The inflation-driven asset reallocation might also produce a Mundell–Tobin effect, enhancing growth.

scholarly journals Education, Income, Wealth Inequality and Business Cycles in a General Equilibrium Growth Model

2020 ◽  
Vol 26 (4) ◽  
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Business Cycles ◽  
General Equilibrium ◽  
Growth Model ◽  
Open Economy ◽  
Wealth Inequality ◽  
Learning By Doing ◽  
Government Subsidy ◽  
Wealth Inequalities

The paper is concerned with the dynamic interactions between physical capital, human capital, income and wealth inequalities between different households with government subsidy to education. It generalizes the endogenous growth model of a small-open economy proposed by Zhang (2016). Zhang’s paper deals with income and wealth inequalities between heterogeneous households with government subsidy to education. The paper makes a contribution to the literature of economic growth with endogenous education by integrating Solow-Uzawa’s neoclassical growth theory, Uzawa-Lucas model, Arrow’s learning by doing, Zhang’s creative leisure, and Walrasian general equilibrium theory. The model treats endogenous capital and human capital accumulation as the main engines of economic growth. This study generalizes Zhang’s model by allowing constant coefficients to be time-dependent. We simulate the generalized model to demonstrate existence of business cycles due to various exogenous periodic shocks.

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